DVB signs agreement with ADB for US$ 15 m credict facility

Indunil Hewage

In a bid to develop home ownership across the country, Sri Lanka's
youngest Commercial Bank, the DFCC Vardhana Bank (DVB) yesterday, signed
an agreement with the Asian Development Bank (ADB) for a $ 15 million
credit lending facility. The credit facility is specifically granted to
the North and East areas affected by conflict, the South and East of
country devastated by the Tsunami and women borrowers and single
mothers.

DFCC and DFCC Vardhana Bank Chairman J.M.S. Brito and Asian
Development Bank Country Director Rita O’Sullivan exchanging the
agreement for a $ 15 million term lending facility. Picture by
Nissanka Wijeratne

The 5.0% of loan would be devoted to women borrowers and single
mothers in the country.

Speaking at the event, DFCC Vardhana Bank CEO Lakshman Silva, said
that ADB's credit facility had a wider audience, with a part of the loan
facility will be devoted the women borrowers, North and East areas
affected by conflict, south and east of country devastated by the
Tsunami, while the rest of the money would be granted to middle income
professionals who aspire to have their own houses.

The DVB presence in the country is more than enough to disburse
credit facility in a proper manner. ADB has offered this credit line
facility on an attractive interest rate which would be much lower than
other commercial housing loans offered in the market.The term 'lending
facility' by ADB has been received at an opportune moment for DVB, where
its loan portfolio could grow above the 18% growth ceiling that had been
imposed by the Central Bank of Sri Lanka (CBSL) on the strength of its
acquisition of a foreign funding line.

The extra funding ability gives the DVB a distinct competitive
advantage above many other commercial banks who have reached their CBSL
imposed credit ceiling.

"In Sri Lanka, 80% of the population does not have access to long
term finance for housing requirements. The housing shortage is being
experienced in many parts of the country, while general loans in Sri
Lanka have a very short time period.

"Tenure of this loan is the most important aspect of the credit
facility and the ADB through this initiative, hopes to allow more
private sector banks to come forward to play a major role in the
financial segments of the country," Asian Development Bank Country
Director Rita O'Sullivan said.